HBO & COMPANY POSTS POSITIVE EARNINGS
FOR FOURTH CONSECUTIVE QUARTER
ATLANTA, July 22 /PRNewswire/ -- Healthcare information systems vendor HBO & Company (NASDAQ: HBOC) today reported positive earnings for the fourth consecutive quarter.
Revenue from continuing operations in the company's second quarter ended June 30 was $45.4 million -- a 20 percent increase over the prior year's second quarter. "This fourth consecutive quarter of solid earnings demonstrates the significant turnaround we've gone through," said Chief Executive Office Charles W. McCall.
In addition, the company generated strong cash flow during the quarter enabling it to further reduce its long-term debt from $20 million at the beginning of the year to $7 million. McCall commented that the company plans to continue its aggressive repayment schedule to be debt-free by year-end.
Operating expense increased only 4 percent to $41.6 million, compared to $40 million in operating expense for second quarter 1991 (excluding the $10.5 million nonrecurring charge for that period). Expenses continue to be held in line by the control program initiated in mid-1991. Income from continuing operations for the quarter totaled $2.6 million compared to a $8.5 million loss reported for the second quarter 1991. The quarter's earnings per share were 17 cents, in contrast to a 62-cent quarterly loss reported last year.
For the six months ended June 30, revenue from continuing operations increased 18 percent to $90.7 million over the prior-year period. Expenses for the period grew only 6 percent to $84.3 million (excluding the $10.9 million nonrecurring charge from the 1991 period's operating expense). Income from continuing operations totaled $4.1 million compared to a loss of nearly $9 million for the six months ended June 30, 1991. Year-to-date earnings per share reached 27 cents compared to a 65-cent loss per share from continuing operations for the first six months of 1991.
The second quarter revenue increase was primarily due to continuing high levels of UNIX/RISC solution sales and installations. Solid Connect Technology Group performance in local area and wide area network sales and increased HealthQuest(sm) package software sales also contributed to the satisfying performance to date this year.
Of particular note, in the second quarter the company signed a master agreement worth more than $20 million with the Sisters of Charity of the Incarnate Word of Houston. The agreement calls for the installation of HBO products at multiple locations within the Sisters of Charity system. The company is currently vendor of choice at eight of the 11 Sisters of Charity hospitals.
The scheduled installation of these systems plus the sales of 22 CLINSTAR(R) systems to other hospitals in the second quarter are filling HBO's remaining 1992 installation schedule. The backlog of software and hardware to be installed, excluding the Sisters of Charity, stood at $15.2 million at June 30. "With this healthy backlog, as well as continued cost controls and a positive cash flow, we anticipate a strong showing for the remainder of 1992," said McCall.
In June, HBO also signed a letter of intent to form a joint venture with Healthcare Affiliated Services, a wholly owned subsidiary of Blue Cross of Western Pennsylvania, to offer its 102 member hospitals new information systems products and services. "This partnership could move HBO into new territories and position us to introduce many innovative services to the marketplace," said McCall.
HBO & Company delivers a wide range of patient care, clinical and financial software products, as well as networking technologies, outsourcing services and other professional services to healthcare organizations in the United States, the United Kingdom and Canada. The following results are unaudited (prior period results are restated to reflect the company's discontinuance of its equipment maintenance business in 1991):
HBO & COMPANY
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
(000s omitted, except for per-share data)
3 mos. ended 6 mos. ended
6/30/92 6/30/91 6/30/92 6/30/91
Revenue $45,435 $37,775 $ 90,729 $ 77,129
Operating expense:
Cost of operations 26,107 23,424 53,152 46,984
Marketing 5,025 4,991 10,162 9,743
Research & development 4,873 4,697 9,598 9,216
General & administrative 5,602 6,902 11,371 13,429
Nonrecurring charge --- 10,483 --- 10,883
Total operating expense 41,607 50,497 84,283 90,255
Operating income (loss) 3,828 (12,722) 6,446 (13,126)
Interest inc. (exp.), net 155 (94) (257) (365)
Income (loss) from cont. opers.
before provision (credit)
for income taxes 3,983 (12,816) 6,189 (13,491)
Provision (credit) for
income taxes 1,354 (4,303) 2,104 (4,541)
Income (loss) from cont.
operations 2,629 (8,513) 4,085 (8,960)
Income from discontinued
opers., net of income tax
credits of ($808) and ($748)
in 1991 --- (1,356) --- (1,264)
Net income (loss) $ 2,629 $(9,869) $ 4,085 $(10,214)
Earnings (loss) per share:
Primary
Continuing operations $ 0.17 $ (0.62) $ 0.27 $ (0.65)
Discont. operations --- (0.10) --- (0.09)
Total primary $ 0.17 $ (0.72) $ 0.27 $ (0.74)
Fully diluted
Continuing operations $ 0.17 $ (0.62) $ 0.27 $ (0.65)
Discont. operations --- (0.10) --- (0.09)
Total fully diluted $ 0.17 $ (0.72) $ 0.27 $ (0.74)
Weighted average shares outstanding:
Primary 15,421 13,798 15,118 13,741
Fully diluted 15,421 13,798 15,134 13,741
Cash dividends declared
per share $ 0.075 $ 0.075 $ 0.075 $ 0.075
-0- 7/22/92
/CONTACT: Jeanne Bateman, investor relations of HBO & Co., 404-393-6577/
(HBOC) CO: HBO & Company ST: Georgia IN: CPR SU: ERN

BR-BN -- AT001 -- 1710 07/22/92 09:07 EDT

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